County Pension Fund Is Strong * Consultant Says Northampton Employees' Account Is In The Black.

September 05, 1997|by MATT ASSAD, The Morning Call

Northampton County's vibrant employees pension fund will save taxpayers about $3.5 million in 1998, a consultant told the Pension Board on Wednesday.

Because the county's $140 million retirement fund has more assets than liabilities -- one of only 12 county funds in the state that strong -- the county will not have to make its $3.5 million contribution into the fund, consultant Norman Pickering, of the Hay/Huggins Group of Philadelphia said.

"You give employees the highest interest and the highest benefits allowed by law and your assets still exceed your liabilities," Pickering said. "It doesn't get better than that."

Bigelow had feared that new regulations set by the Government Accounting Standards Board would force the county to make its scheduled contribution of $3.5 million, even though its fund is strong and its excess interest account exceeds $28 million. Such a contribution would come directly from the general fund and would represent more than 0.5 of 1 mill of tax.

However, Pickering explained that because the fund would still have $5 million in it, even if all county employees cashed in their retirement tomorrow, he was able to list the county's minimum required contribution as zero.

His assessment of the fund's strength appeared to support pension fund manager C.S. McKee's contention that it has done a good job managing the retirement money. The Pittsburgh company has come under fire lately from Bigelow, who has termed its performance "lackluster."

The board last month decided to hire a consultant to help reorganize the strategy used by C.S. McKee and better monitor the fund.

C.S. McKee senior vice president Norman Allen, in defending his company, pointed out that the county fund's 15.6 percent return last year was above the median rate of 14.5 percent, and exceeded every objective set in the county's plan.

Bigelow, saying last year was a landmark investment year in which many county funds had returns approaching 30 percent, did not back away from her criticism.

"Slightly above the median is a C-plus," Bigelow said. "I think we could do better, and I think our retirees deserve better."